Poland’s Gdańsk LNG on track, but peak demand approaches

Poland’s TSO GAZ-SYSTEM announced in early April that it has selected a contractor for the quay and offshore gas pipeline for the 6 bcm/year Floating Storage Regasification Unit (FSRU) which is being built in the South Korean HD Hyundai Heavy Industries shipyard in Ulsan in the northern port of Gdańsk.

Construction of the quay in the Gulf of Gdańsk will begin in the second half of 2025 and the planned launch date of the FSRU is the first quarter of 2028, GAZ-SYSTEM said.

With the capacity of the onshore Świnoujście terminal expanded from 5 bcm/y to 8.3 bcm/y since January this year, Poland looks set to be a key destination for LNG cargoes in the coming years. This could benefit landlocked countries in the region, including Czechia, Slovakia and Austria, and probably also Ukraine.

To this end, Krzysztof Leśniak, a Warsaw-based Counsel with Schoenherr Attorneys at Law told Gas Outlook that the FSRU in Gdańsk will be essential for Poland’s energy security and diversification. He noted that apart from domestic production, Poland has currently two main routes of receiving gas: Świnoujście LNG and the 10 Bcm/year Baltic Pipe which brings in Norwegian gas to Poland via the North Sea Europipe II.

However, the capacity of the LNG terminal in Świnoujście is reaching its limits, Leśniak noted. Data released by Gas Infrastructure Europe shows that the utilisation rate at Świnoujście, was close to 90% in a one-year period between early April 2024 and early April 2025.

“If the operation of the Baltic Pipe is even temporarily interrupted, securing Polish gas supply will be significantly hindered. The FSRU will mitigate this risk and enable receiving more gas directly in Poland instead of using the terminals of other countries,” said Leśniak.

He also noted that domestic demand for natural gas is expected to increase in the next few years before reaching its peak around 2030.

“Thirdly, Poland is open about its ambitions of securing gas supplies for neighbouring countries, in particular Ukraine and Slovakia which may further transfer gas to Hungary. The FSRU may play a key role in making such cooperation come true,” Leśniak noted.

Poland’s draft updated National Energy and Climate Plan [NECP] suggest gas demand in Poland could increase to 23 bcm by 2030, up from an estimated 21 bcm in 2024, as gas partially replaces coal in power generation and heating. By 2040, gas demand is projected to have shrunk to 13 bcm as renewable energy expands further and nuclear power also gains market share, according to the draft.

Hedge for energy security or stranded asset?

But is this expected short-term increase in demand enough to justify new import infrastructure? Some will say no.

“It is true that the utilisation rate at the existing Świnoujście terminal is high, but on the other hand the European trend is that we are heading towards lower gas demand,” Diana Maciąga a climate and fossil gas campaigner at the Polish Green Network tells Gas Outlook.

“Poland’s draft NECP suggests gas demand will only increase modestly in the coming years and peak by 2030. We have enough existing import capacity to cover for a slight increase in demand. Besides, the Gdansk FSRU will not be operational before 2028 which means there is a risk it will become a stranded asset.”

Maciąga said the Polish gas sector is pushing its own narrative.

“Gaz-System and ORLEN’s gas demand projections and investment plans are not in line with the draft NECP. The FSRU is in reality built for ORLEN to accommodate its U.S. LNG import contracts and also for Orlens’s growing overseas production and upstream expansion. As for re-exports to Czechia and Slovakia, there is no credible analysis yet suggesting these countries will need the gas.”

A spokesperson for ORLEN, Mateusz Witczyński, told Gas Outlook the differences between the company’s forecasts and those presented by Poland’s Ministry of Climate and Environment NECP primarily reflect varying assumptions regarding the role of natural gas in electricity generation. According to the NECP, natural gas will only play a limited role until 2030, mainly restricted to meeting peak demand. 

“ORLEN’s Strategy, however, envisages a broader role for natural gas during this period – not only meeting peak demand but also supporting overall grid balancing, including baseload generation. As such, natural gas will serve as a crucial transition fuel, supporting Poland’s incremental energy transition towards Net Zero,” said Witczyński.

ORLEN will be the exclusive user of the Gdańsk FSRU for the entire 15-year period covered by the contract with Gaz-System.

Meanwhile, Maciąga said the Polish Green Network is calling for a strategy of actively reducing gas consumption which she said is an idea “completely absent” from the political discussion in Poland.

She added that, because of Poland’s capacity market – which awards contracts to secure revenues for power generators –, a lot of new CCGTS are at the planning stage, around 15 GW of capacity.

“At the same time, alternatives such as Demand Side Response (DSR) are not taken seriously in Poland and are seen as useful only in extreme circumstances. I understand it is a huge challenge that many older coal-fired plants are coming offline but there is no will to discuss an alternative energy system with decentralised production. This business-as-usual approach must change,” she said.

As for Poland’s final NECP, the deadline for submission to the European Commission expired in June last year.

The European Commission said it may refer Poland and four other member states to the Court of Justice of the European Union unless they submit final NECPs by mid-May this year.

(Writing by Andreas Walstad; editing by Sophie Davies)